CADBURY SCHWEPPES OVERSEAS LTD,MUMBAI vs. ASST DIT (IT) 1(2), MUMBAI

ORDER PER N.K. PRADHAN, A.M. This is an appeal filed by the assessee. The relevant assessment year is 2008-09. The appeal is directed against the order of the Commissioner of Income Tax (Appeals)-10, Mumbai and arises out of penalty u/s 271G of the Income Tax Act 1961, (the ‘Act’). 2. The grounds of appeal filed by the assessee read as under:

1. On the facts and in the circumstances of the case and in law, the learned Assessing Officer ('AO') has erred in levying and the Hon’ble Commissioner of Income-tax Appeals ['CIT(A)'] has erred in confirming the levy of penalty under Section 271G of the Income-tax Act, 1961 ('Act') of Rs.48,70,467.

2. On the facts and in the circumstances of the case and in law, the learned AO erred in levying and the Hon'ble CIT(A) erred in confirming the levy of penalty under Section 271G of the Act, even though the learned Transfer Pricing Officer in the transfer pricing order has not disturbed the Arm's Length Price determined by the Appellant.

3. On the facts and in the circumstances of the case and in law, the learned AO erred in levying and the Hon’ble CIT(A) erred in confirming the levy of penalty under Section 271G of the Act, even though the default, at best, can be said to be technical or venial breach of the provisions of the Act leading to no tax effect.

4. On the facts and in the circumstances of the case and in law, the learned AO erred in levying and the Hon'ble CIT(A) erred in confirming the levy of penalty under Section 271G of the Act without appreciating the fact that since Transfer Pricing Officer has accepted that Appellant's transaction are at arm's length hence, there is no failure on the part of the Appellant in furnishing information / details as required for under Section 92D of the Act in respect of its international transactions.

5. On the facts and in the circumstances of the case and in law, the learned AO erred in levying and the Hon’ble CJT(A) erred in confirming the levy of penalty under Section 271G of the Act without appreciating the fact that the transactions of the Appellant are replica transactions of Cadbury India Limited ('CIL') and it has relied on the information / documentation maintained by CIL which were already submitted during CIL's assessment proceedings.

6. On the facts and in the circumstances of the case and in law, the learned AO erred in levying and the Hon’ble CIT(A) erred in confirming the levy of penalty under Section 271G of the Act without appreciating the provisions of Section 273B of the Act and other applicable provisions of the Act having regard to the fact that there was reasonable cause for not being able to respond to the notices of the learned AO.

3. Briefly stated, the facts of the case are that the assessee filed its return of income for the AY 2008-09 on 30.09.2008 declaring total income of Rs.24,35,23,345/-. The Assessing Officer (AO) made the assessment u/s 143(3) at Rs.24,35,23,350/-. The AO observed that the assessee had failed to furnish information or document u/s 92D before the Transfer Pricing Officer (TPO). Therefore, the AO imposed a penalty of Rs.48,70,467/- u/s 271G.

4. Aggrieved by the order of the AO the assessee filed an appeal before the Ld. CIT(A). We find that the Ld. CIT(A) has dismissed the appeal filed by the assessee on the ground that the assessee failed to file before the TPO information or document u/s 92D.